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Bitcoin Dominance Rate Breaks Down From Long-Term Support

2 mins
Updated by Kyle Baird
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In Brief

  • The Bitcoin dominance rate has fallen below a long-term support level of 62.5%.
  • The dominance rate is possibly finishing the A wave of an A-B-C correction.
  • Higher Bitcoin prices have caused a decrease in BTCD.
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The Bitcoin dominance rate (BTCD) has broken down from a long-term support level.
A bounce near 59% is expected before the downward trend resumes.

Bitcoin Dominance Rate Woes

The Bitcoin dominance rate has been decreasing since May 8 when it reached a high just below 70%. On July 25, the BTCD reached the long-term 62% support area and bounced back to the upside. The higher rate could not be sustained though, and on Aug 13 the rate plunged back to where it started and went even lower in the days that followed. At the time of press, the BTCD was just above 60%. While both the short and the long-term MACD show that the downward momentum is getting stronger, the daily RSI has generated bullish divergence and is approaching the trend-line of the divergence. This could make it possible for the BTCD to make another bounce back.
Bitcoin Dominance Rate Breakdown
BTCD Chart By TradingView
Cryptocurrency trader @Anbessa100 stated that the Bitcoin dominance rate is likely to continue moving downwards towards 59% but is expecting a bounce afterward. A decrease to 59% would cause the RSI to drop to the aforementioned trend-line, allowing for the bounce to transpire.
Bitcoin Dominance Rate
Source: Twitter

Potential Bounce

The Bitcoin dominance rate has possibly been completing a W-X-Y correction (white) since September 2019. If so, it currently looks to be in the Y wave, which is transpiring with an A-B-C formation (black). The current A wave has almost reached the 1.61 Fib level of the first A wave, which falls at 59.6%. This further increases the chances of a possible bounce, which could take the rate towards 64% before a final drop.
BTCD Wave Count
BTCD Chart By TradingView
The hourly chart suggests a bounce near 59.5% since there is a growing bullish divergence in both the RSI and MACD.

Relationship to Bitcoin

Since the beginning of August, the relationship between BTC (blue) and BTCD (green) has been mostly negative, meaning an increase in the BTC price has caused a decrease in BTCD. This has been especially pronounced during rapid movements. If this relationship holds, a decrease in the BTC price would be required for an increase in BTCD.
BTCD & BTC
BTCD Chart By TradingView
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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